IFRS Restatement
Bellway PLC
31 March 2006
Bellway plc
Restatement of financial information under Adopted International Financial
Reporting Standards
Introduction
Bellway plc (the Group) has, historically, prepared its consolidated financial
statements under UK Generally Accepted Accounting Principles (UK GAAP). For
accounting periods beginning on or after 1 January 2005, the Group is required
to prepare its consolidated financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union (Adopted IFRS).
The Group's first published information prepared on the basis of Adopted IFRS
will be in respect of its interim results for the half year ended 31 January
2006. The results for this half year will be announced on Tuesday 4 April 2006.
The Group's first annual report under Adopted IFRS will be for the year ending
31 July 2006. As comparative figures are provided, the effective date for
transition to Adopted IFRS is 1 August 2004. Accordingly the financial
information for the half year ended 31 January 2005 and the year ended 31 July
2005 has been restated.
This report summarises, for the half year ended 31 January 2005 and the year
ended 31 July 2005, the effects of the change from UK GAAP to Adopted IFRS on
the Group's financial statements. The contents of the report are :
• Outline of the basis used for the preparation of the IFRS information
• Overview of the impact of IFRS adoption
• Significant changes in accounting policies and impact on the financial
statements
• Significant accounting policies applied under IFRS
• (Appendix 1) Restated primary statements for the half year ended 31
January 2005 and the year ended 31 July 2005
• (Appendix 2) Reconciliations of profit and equity for the half year
ended 31 January 2005 and the year ended 31 July 2005
• (Appendix 3) Reconciliation of equity at 1 August 2004
Basis of preparation of transitional information under Adopted IFRS
The financial information has been prepared on the recognition and measurement
basis of IFRS adopted by the EU and in accordance with the accounting policies
that the Group expects to apply in its first IFRS financial statements.
The significant accounting policies applied are set out below. These are
preliminary accounting policies pending finalisation at the year end.
Transitional arrangements
IFRS 1 - 'First Time Adoption of International Financial Reporting Standards'
permits companies to apply certain exemptions from the full requirements of IFRS
during transition.
No adjustments have been made for any changes in estimates that were made at the
time of approval of the UK GAAP financial statements on which the preliminary
IFRS financial information is based. The Group has applied the following key
exemptions :
IFRS 2 - 'Share-based Payment'
The Group has elected to apply IFRS 2 only to share-based payment transactions
granted after 7 November 2002 which had not fully vested at 1 January 2005.
IFRS 3 - 'Business Combinations'
The Group has chosen not to restate business combinations prior to the
transition date on an IFRS basis.
Overview of the impact of IFRS adoption
Certain key areas of the Group's activities will remain unaffected by the
adoption of IFRS. Most notably :
• Dividend policy
• Cashflow
• Effective tax rate
• Banking arrangements
• Group strategy and processes for decision making
Based on the accounting policies detailed in the subsequent section, the effect
of the transition on key reported results is as follows:
Half year ended Year ended
31 January 2005 31 July 2005
UK GAAP IFRS UK GAAP IFRS
£m £m £m £m
Operating profit 96.2 96.6 229.7 230.3
Profit for the period 64.2 62.7 152.8 149.2
Basic EPS 56.5p 56.1p 134.6p 133.1p
Net assets 725.9 706.4 796.1 779.8
Appendices 2 and 3 provide detailed reconciliations of the movements for the
Income Statement and Balance Sheet.
The most significant changes in the Group's financial statements, resulting from
the transition to IFRS are in the following areas :
• The reclassification of the preference shares in the balance sheet, out
of equity and into non-current liabilities.
• The recognition of the pension scheme deficit in the balance sheet, and
the corresponding increases in administrative expenses and finance expenses in
the income statement and the actuarial loss in the Statement of Recognised
Income and Expense (SORIE).
• The exclusion of proposed equity dividends from the income statement
and from liabilities in the balance sheet. Applying Adopted IFRS, an interim
equity dividend is not recorded until it is paid, also a final equity dividend
is not recorded until it is approved by shareholders. Under Adopted IFRS, the
dividend is presented as a movement in equity.
• Land creditors are now discounted to fair value with a corresponding
reduction in inventories. The discount represents notional interest and this is
reflected as increased financing costs over the deferral period. The reduction
in the inventory results in reduced cost of sales and a higher operating margin
over the life of a development.
• There is now a change to the basis of measurement of the charge to the
income statement in relation to share based payments.
Significant changes in accounting policies and impact on the financial
information
The following narrative covers the half year to 31 January 2005 ('the half
year') and the year to 31 July 2005 ('the year end').
IAS 32 and IAS 39 - 'Financial Instruments'
Preference dividends expensed are now disclosed within financing costs rather
than as dividends. This results in finance costs increasing by £0.9m for the
half year ended 31 January 2005 and by £1.9m for the year ended 31 July 2005.
The preference shares of £20.0m are removed from equity and shown within
non-current liabilities. The £0.6m preference dividend, which is accrued using
the effective interest rate method at each balance sheet date, is recognised
within interest bearing loans and borrowings.
IAS 2 - 'Inventories'
Land purchased on deferred terms is measured at fair value. The associated land
creditor is reduced by an amount of notional interest; the liability is then
increased to the settlement value over the period of deferral. The net effect is
a reduction in the creditor of £2.2m at the half year and £2.9m at the year end.
The corresponding inventory is also reduced by the notional interest; the lower
land value results in a reduced charge to cost of sales as the profit is taken
on a development. The net effect on inventories is a reduction of £6.8m at the
half year and £8.0m at the year end.
Cost of sales is reduced by £0.6m and £1.5m respectively.
The increased interest is charged to financing costs over the deferral period
and amounts to £1.3m at the half year and £2.7m at the year end.
The differing rate at which the finance costs and cost of sales are recognised
in the income statement produces a deferred tax credit shown in income tax
expense.
IAS 10 - 'Events After the Balance Sheet Date'
Under IAS 10 only dividends which are approved at the balance sheet date are
shown as a liability.
Dividends are recognised as an appropriation of equity when they are paid, for
an interim dividend, or approved by shareholders at the AGM, for a final
dividend. Amounts previously accrued in the balance sheet are now removed,
resulting in reduced liabilities at the half year of £14.7m and £20.7m at the
year end. The net increase in equity is shown within the Statement of Changes in
Equity.
IAS 19 - 'Employee Benefits'
Under UK GAAP the Group accounted for the defined benefit pension scheme in
accordance with SSAP 24. A pension prepayment was held in the balance sheet
representing the difference between pension contributions and the regular
pension cost established actuarially. The Group made a special contribution of
£9.8m to the scheme to address the deficit identified in the actuarial valuation
in 2002 and this accounted for a large part of the total pension prepayment.
Under IFRS this prepayment reverses, reducing trade and other receivables by
£8.4m at the half year and £9.1m at the year end.
IAS 19, as amended in 2004, provides an option for companies to account for
actuarial gains and losses in full in the SORIE. The Group has adopted this
approach from the date of transition.
The Group's full year financial statements under UK GAAP disclosed defined
benefit pension scheme assets and liabilities under FRS 17 within a note to the
financial statements. The valuation approach used under FRS 17 is similar to
that used for IAS 19 with the exception that IAS 19 requires the market
valuation of scheme assets is carried out on a bid basis rather than a
mid-market basis. The deficit under IAS 19 is disclosed within retirement
benefit obligations on the balance sheet. The deficit is £10.1m at the half year
and £12.1m at the year end.
Under IAS 19, the current service cost (which is the increase in the present
value of the defined benefit obligation as a result of employee service in the
current period) is recognised within the income statement. Past service costs
(which arise when the employer makes a commitment to provide an increased level
of benefit) are also recognised within the income statement. The SSAP 24 pension
charge has been reversed. The net effect is an increased charge to the income
statement of £0.2m for the half year and £0.6m for the full year.
The interest charge (which is the increase during the period in the present
value of defined benefit obligations) is recognised in financing costs. For the
half year the charge was £0.2m and for the full year it was £0.3m.
IFRS 2 - 'Share-based Payments'
In accordance with IFRS 2, the Group has recognised a charge to the income
statement in relation to equity settled share options granted after 7 November
2002 which had not fully vested at 1 January 2005. The corresponding entry is
recognised directly in equity. Fair values have been calculated for the Group's
various option schemes using an appropriate option pricing model. For the
savings related share option schemes, a method using the Black-Scholes formula
has been used due to the relatively short exercise window. For the employee
share option schemes, a lattice model has been used. This enables early exercise
behaviour to be modelled in a more sophisticated manner than the Black-Scholes
formula. For the performance share plan, a Monte Carlo simulation technique has
been applied since the performance test measures the Group's total shareholder
return relative to the appropriate peer group.
The charges calculated for the schemes are spread over the period in which the
options vest. Adjustments are made to allow for actual and expected levels of
vesting.
Charges made previously under UK GAAP, have been reversed (to the extent that
they related to options now incorporated into the IFRS 2 calculation) and an
IFRS 2 charge has been recognised. The net effect is a £nil charge to
administrative expenses for the half year and £0.3m for the full year.
The corresponding liability under UK GAAP (which is part of retained earnings)
for options now dealt with under IFRS 2 has also been reversed.
An estimate of the tax base at each balance sheet date is established by
multiplying the option's intrinsic value, which is the difference between the
exercise price and the market value at the balance sheet date, by the vesting
period that has lapsed. The temporary difference resulted in a deferred tax
asset of £2.6m at the half year and £2.4m at the year end.
Conclusion
Adopting IFRS has not affected the Group's operations in terms of strategy.
Also, cash flows and banking arrangements are unaffected, and there is no
material impact on the effective tax rate.
ACCOUNTING POLICIES
The preliminary restated financial information ('the financial information') has
been prepared in accordance with the recognition and measurement requirements of
International Financial Reporting Standards (IFRS) as adopted by the European
Union and IFRS 1 - 'First time adoption of IFRS'.
IAS 19, as amended in 2004, provides an option for companies to account for
actuarial gains and losses in full in the SORIE. The Group has adopted this
approach from the date of transition.
A summary of the significant accounting policies adopted and consistently
applied in the preparation of the financial information is shown below :
(a) Consolidation
The consolidated financial information incorporates the financial statements of
the Company and all its subsidiary undertakings.
The consolidated financial information includes the Group's share of costs and
subsequent share of profits of associates on an equity accounted basis and for
jointly controlled entities, includes the Group's proportionate share of the
entity's assets, liabilities, revenues and expenses.
(b) Goodwill
The Group's policy up to and including 1997 was to eliminate goodwill arising
upon acquisitions against reserves. Under IFRS 1 and IFRS 3, such goodwill will
remain eliminated against reserves.
(c) Property, plant and equipment
Items are stated at cost less accumulated depreciation and impairment losses.
(d) Investment property
Investment property is initially recognised at cost. Subsequent to recognition,
investment property is measured using the cost model and is carried at cost less
any accumulated depreciation and any accumulated impairment losses.
The residual values and useful lives of investment properties are reviewed at
each financial year end. No depreciation is charged where the residual value is
equal to, or greater than, the carrying amount of the asset.
(e) Inventories
Inventories, including part exchange properties, are stated at the lower of cost
and estimated net realisable value, less payments on account and related grants.
Housebuilding work in progress includes direct material and labour costs and
site overheads.
(f) Trade and other receivables
Trade receivables are stated at their fair value at the date of initial
recognition and subsequently at amortised cost less allowances for impairment.
(g) Trade and other payables
Trade payables on normal terms are not interest bearing and are stated at their
fair value at the point of initial recognition and subsequently at amortised
cost. Trade payables on deferred terms, most notably in relation to land
purchases, are recorded at their fair value and subsequently at amortised cost.
(h) Share capital
I. Preference share capital
Preference share capital is redeemable and is classified as a liability.
Dividends thereon are recognised in the income statement as interest expense.
II. Dividends
Dividends on redeemable preference shares are recognised as a liability and
accrued using the effective interest rate method.
Other dividends are recognised as a liability in the period in which they are
approved.
(i) Grants
Grants are included within work in progress and stocks in the balance sheet and
are credited to the profit and loss account over the life of the developments to
which they relate.
(j) Revenue recognition
Revenue from private housing sales is recognised when transactions have legally
completed. Sales of part exchange properties are not included in revenue. The
net result of these transactions is classified as a cost of sale.
(k) Depreciation
Freehold land is not depreciated. Buildings held as fixed assets are depreciated
in equal annual instalments over 40 years. Vehicles, plant and equipment are
depreciated on a straight line basis at rates which are calculated to write off
the cost of those assets over their useful lives, which are estimated at between
three and ten years.
(l) Taxation
The charge for taxation is based on the profit for the year and takes into
account current and deferred taxation. The charge is recognised in the income
statement except to the extent that it relates to items recognised in equity, in
which case it is recognised in equity.
Deferred taxation is provided for all temporary differences between the carrying
amounts of assets and liabilities in the financial statements and the
corresponding tax bases.
(m)Employee benefits - retirement benefit costs
For the defined benefit scheme, the liability is calculated as the present value
of the defined benefit obligation at the balance sheet date. The fair value of
scheme assets are then deducted. The calculation is performed by a qualified
actuary using the projected unit credit method. All actuarial gains and losses
are recognised immediately in the Statement of Recognised Income and Expense
(SORIE).
Defined contribution pension costs are charged to the income statement in the
period for which contributions are payable.
(n) Employee benefits - share-based payment
In accordance with IFRS 2, the fair value of equity settled share options
granted is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured as at the date the options are granted.
Various option pricing models are used according to the terms of the option
scheme under which the options were granted. The fair value is spread over the
period during which the employees become unconditionally entitled to the
options. The amount recognised as an expense is adjusted to reflect the actual
number of options that vest.
IFRS 2 has been applied to options granted after 7 November 2002, which had not
vested at 1 January 2005.
(o) Operating leases
Operating lease rentals are charged to the Income Statement on a straight line
basis over the period of the lease.
(p) Finance income and expenses
Finance expenses includes interest on bank borrowings and dividends on
redeemable preference shares. The discounting of the deferred payments for land
purchases produces a notional interest payable amount and this is also charged
to finance expenses.
Finance income includes interest receivable on bank deposits.
Appendix 1
Consolidated Income Statement
(unaudited) Half year Year
ended ended
31 January 31 July
2005 2005
(restated) (restated)
£m £m
Revenue 493.9 1,178.1
Cost of sales (372.5) (896.2)
Gross profit 121.4 281.9
Administrative expenses (24.8) (51.6)
Operating profit 96.6 230.3
Finance income 1.4 2.2
Finance expenses (8.3) (18.6)
Profit before taxation 89.7 213.9
Income tax expense (27.0) (64.7)
Profit for the period 62.7 149.2
Earnings per ordinary share - Basic 56.1p 133.1p
- Diluted 55.6p 131.8p
Consolidated Statement of Recognised Income and Expense
(unaudited) Half year Year
ended ended
31 January 31 July
2005 2005
(restated) (restated)
£m £m
Actuarial losses on defined benefit pension scheme (3.0) (5.0)
Tax on items taken directly to equity 0.9 1.5
Net expense recognised directly in equity (2.1) (3.5)
Profit for the period 62.7 149.2
Total recognised income for the period 60.6 145.7
Appendix 1
Consolidated Balance Sheet
(unaudited) At At
31 January 31 July
2005 2005
(restated) (restated)
£m £m
ASSETS
Non-current assets
Property, plant and equipment 16.2 17.6
Investments in associates - 0.1
Other receivables 1.3 7.5
Deferred tax assets 11.3 11.5
28.8 36.7
Current assets
Inventories 1,098.9 1,238.4
Trade and other receivables 28.7 31.6
Cash and cash equivalents 57.9 66.4
1,185.5 1,336.4
Total assets 1,214.3 1,373.1
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings (193.0) (256.0)
Retirement benefit obligations (10.1) (12.1)
Other payables (18.2) (19.3)
(221.3) (287.4)
Current Liabilities
Interest bearing loans and borrowings (49.0) (2.0)
Trade and other payables (210.0) (271.6)
Current tax liabilities (27.6) (32.3)
(286.6) (305.9)
Total liabilities (507.9) (593.3)
Net assets 706.4 779.8
EQUITY
Issued capital 14.1 14.2
Share premium 106.3 108.9
Other reserves 1.5 1.5
Retained earnings 584.6 655.3
Total equity attributable to equity holders of the parent 706.5 779.9
Minority interest (0.1) (0.1)
Total equity 706.4 779.8
Appendix 1
Group Cash Flow Statement
(unaudited) Half year Year
ended ended
31 January 31 July
2005 2005
(restated) (restated)
£m £m
Cash flows from operating activities
Profit for the period 62.7 149.2
Depreciation charge 1.6 3.3
Profit on sale of property, plant and equipment (0.1) (0.2)
Finance income (1.4) (2.2)
Finance expenses 8.3 18.6
Share based payment charge 0.7 1.6
Income tax expense 27.0 64.7
Increase in inventories (79.5) (219.1)
Increase in trade and other receivables (2.8) (11.9)
(Decrease) / increase in trade and other payables (60.2) 0.7
Cash from operations (43.7) 4.7
Interest paid (6.5) (15.4)
Income tax paid (35.2) (68.1)
Net cash outflow from operating activities (85.4) (78.8)
Cash flows from investing activities
Acquisition of property, plant and equipment (1.6) (5.1)
Proceeds from sale of property, plant and equipment 0.5 1.1
Interest received 1.4 2.3
Net cash inflow / (outflow) from investing activities 0.3 (1.7)
Cash flows from financing activities
Increase in bank borrowings - 63.0
Proceeds from the issue of share capital on exercise of share options 1.8 4.5
Purchase of own shares by employee share option plans (0.1) (0.3)
Dividends paid (17.6) (32.2)
Net cash (outflow) / inflow from financing activities (15.9) 35.0
Net decrease in cash and cash equivalents (101.0) (45.5)
Cash and cash equivalents at beginning of period 111.9 111.9
Cash and cash equivalents at end of period 10.9 66.4
Appendix 1
Consolidated Statement of Changes in Equity
(unaudited)
Half year ended 31 January
2005
Attributable to equity holders of the parent
Ordinary Share Other Retained Total Minority Total
share premium reserves earnings Interest equity
capital
£m £m £m £m £m £m £m
At 1 August 2004 14.0 104.5 1.5 540.8 660.8 (0.1) 660.7
Total recognised income and - - - 60.6 60.6 - 60.6
expense
Dividends on equity shares - - - (17.6) (17.6) - (17.6)
Shares issued 0.1 1.8 - 1.9 - 1.9
Charge in relation to share
options and tax thereon - - - 1.0 1.0 - 1.0
Exercise of share options /
share awards - - - (0.2) (0.2) - (0.2)
At 31 January 2005 14.1 106.3 1.5 584.6 706.5 (0.1) 706.4
Year ended 31 July 2005
Attributable to equity holders of the parent
Ordinary Share Other Retained Total Minority Total
share Premium reserves earnings Interest equity
capital
£m £m £m £m £m £m £m
At 1 August 2004 14.0 104.5 1.5 540.8 660.8 (0.1) 660.7
Total recognised income and - - - 145.7 145.7 - 145.7
expense
Dividends on equity shares - - - (32.2) (32.2) - (32.2)
Shares issued 0.2 4.4 - 4.6 - 4.6
Charge in relation to share
options and tax thereon - - - 1.4 1.4 - 1.4
Exercise of share options /
share awards - - - (0.4) (0.4) - (0.4)
At 31 July 2005 14.2 108.9 1.5 655.3 779.9 (0.1) 779.8
Appendix 2
Reconciliation of Profit
(unaudited)
Half year ended 31 January 2005
Previously IFRS 2 IAS 19 IAS 2 IAS 32 Effect of Restated
reported Share-based Employee Inventories Financial transition under IFRS
under UK GAAP payment benefits instruments IFRS to
£m £m £m £m £m £m £m
Revenue 493.9 - - - - - 493.9
Cost of sales (373.1) - - 0.6 - 0.6 (372.5)
Gross profit 120.8 - - 0.6 - 0.6 121.4
Administrative expenses (24.6) - (0.2) - - (0.2) (24.8)
Operating profit 96.2 - (0.2) 0.6 - 0.4 96.6
Finance income 1.4 - - - - - 1.4
Finance expenses (5.9) - (0.2) (1.3) (0.9) (2.4) (8.3)
Profit before taxation 91.7 - (0.4) (0.7) (0.9) (2.0) 89.7
Income tax expense (27.5) 0.2 0.1 0.2 - 0.5 (27.0)
Profit for the period 64.2 0.2 (0.3) (0.5) (0.9) (1.5) 62.7
Earnings per ordinary share
- Basic 56.5p 56.1p
- Dluited 56.0p 55.6p
Appendix 2
Reconciliation of Profit (unaudited)
Year ended 31 July 2005
Previously IFRS 2 IAS 19 IAS 2 IAS 32 Effect of Restated
reported Share-based Employee Inventories Financial transition under IFRS
under UK GAAP payment benefits instruments IFRS
£m £m £m £m £m £m £m
Revenue 1,178.1 - - - - - 1,178.1
Cost of sales (897.7) - - 1.5 - 1.5 (896.2)
Gross profit 280.4 - - 1.5 - 1.5 281.9
Administrative expenses (50.7) (0.3) (0.6) - - (0.9) (51.6)
Operating profit 229.7 (0.3) (0.6) 1.5 - 0.6 230.3
Finance income 2.2 - - - - - 2.2
Finance expenses (13.7) - (0.3) (2.7) (1.9) (4.9) (18.6)
Profit before taxation 218.2 (0.3) (0.9) (1.2) (1.9) (4.3) 213.9
Income tax expense (65.4) 0.1 0.3 0.3 - 0.7 (64.7)
Profit for the period 152.8 (0.2) (0.6) (0.9) (1.9) (3.6) 149.2
Earnings per ordinary share
- Basic 134.6p 133.1p
- Diluted 133.3p 131.8p
Appendix 2
Reconciliation of Equity
(unaudited)
At 31 January 2005
Previously IFRS 2 IAS 19 IAS 2 IAS 10 IAS 32 Effect of Restated
reported Share-based Employee Inventories Events after Financial transition under IFRS
under UK payment benefits the balance instruments to IFRS
GAAP sheet date
£m £m £m £m £m £m £m £m
ASSETS
Non-current assets
Property, plant and
equipment 16.2 - - - - - - 16.2
Investments in
associates - - - - - - - -
Other receivables 1.3 - - - - - - 1.3
Deferred tax assets 2.4 2.0 5.5 1.4 - - 8.9 11.3
19.9 2.0 5.5 1.4 - - 8.9 28.8
Current assets
Inventories 1,105.7 - - (6.8) - - (6.8) 1,098.9
Trade and other
receivables 37.1 - (8.4) - - - (8.4) 28.7
Cash and cash
equivalents 57.9 - - - - - - 57.9
1,200.7 - (8.4) (6.8) - - (15.2) 1,185.5
Total assets 1,220.6 2.0 (2.9) (5.4) - - (6.3) 1,214.3
LIABILITIES
Non-current liabilities
Interest bearing
loans and (173.0) - - - - - - (173.0)
borrowings
Preference shares - - - - - (20.0) (20.0) (20.0)
Retirement benefit
obligations - (10.1) (10.1) (10.1)
Land creditors (19.9) - - 1.7 - - 1.7 (18.2)
(192.9) - (10.1) 1.7 - (20.0) (28.4) (221.3)
Current Liabilities
Interest bearing
loans and (49.0) - - - - - - (49.0)
borrowings
Trade and other
payables (143.6) - - - - (0.6) (0.6) (144.2)
Land creditors (66.3) - - 0.5 - - 0.5 (65.8)
Dividends (15.3) - - - 14.7 0.6 15.3 -
Current tax
liabilities (27.6) - - - - - - (27.6)
(301.8) - - 0.5 14.7 - 15.2 (286.6)
Total liabilities (494.7) - (10.1) 2.2 14.7 (20.0) (13.2) (507.9)
Net assets 725.9 2.0 (13.0) (3.2) 14.7 (20.0) (19.5) 706.4
EQUITY
Non-equity share capital 20.0 - - - - (20.0) (20.0) -
- preference shares
Issued capital 14.1 - - - - - - 14.1
Share premium 106.3 - - - - - - 106.3
Other reserves 1.5 - - - - - - 1.5
Retained earnings 584.1 2.0 (13.0) (3.2) 14.7 - 0.5 584.6
Total equity
attributable to equity 726.0 2.0 (13.0) (3.2) 14.7 (20.0) (19.5) 706.5
holders of the parent
Minority interest (0.1) - - - - - - (0.1)
Total equity 725.9 2.0 (13.0) (3.2) 14.7 (20.0) (19.5) 706.4
Appendix 2
Reconciliation of Equity
(unaudited)
At 31 July 2005
Previously IFRS 2 IAS 19 IAS 2 IAS 10 IAS 32 Effect of Restated
reported Share-based Employee Inventories Events after Financial transition under IFRS
under UK payment benefits the balance instruments to IFRS
GAAP sheet date
£m £m £m £m £m £m £m £m
ASSETS
Non-current assets
Property, plant
and equipment 17.6 - - - - - - 17.6
Investments in
associates 0.1 - - - - - - 0.1
Other receivables 7.5 - - - - - - 7.5
Deferred tax assets 2.2 1.4 6.4 1.5 - - 9.3 11.5
27.4 1.4 6.4 1.5 - - 9.3 36.7
Current assets
Inventories 1,246.4 - - (8.0) - - (8.0) 1,238.4
Trade and other
receivables 40.7 - (9.1) - - - (9.1) 31.6
Cash and cash
equivalents 66.4 - - - - - - 66.4
1,353.5 - (9.1) (8.0) - - (17.1) 1,336.4
Total assets 1,380.9 1.4 (2.7) (6.5) - - (7.8) 1,373.1
LIABILITIES
Non-current liabilities
Interest bearing
loans and (236.0) - - - - - - (236.0)
borrowings
Preference shares - - - - - (20.0) (20.0) (20.0)
Retirement benefit
obligations - - (12.1) - - - (12.1) (12.1)
Land creditors (21.5) - - 2.2 - - 2.2 (19.3)
(257.5) - (12.1) 2.2 - (20.0) (29.9) (287.4)
Current Liabilities
Interest bearing
loans and (2.0) - - - - - - (2.0)
borrowings
Trade and other
payables (167.5) - - - - (0.6) (0.6) (168.1)
Land creditors (104.2) - - 0.7 - - 0.7 (103.5)
Dividends (21.3) - - - 20.7 0.6 21.3 -
Current tax
liabilities (32.3) - - - - - - (32.3)
(327.3) - - 0.7 20.7 - 21.4 (305.9)
Total liabilities (584.8) - (12.1) 2.9 20.7 (20.0) (8.5) (593.3)
Net assets 796.1 1.4 (14.8) (3.6) 20.7 (20.0) (16.3) 779.8
EQUITY
Non-equity share
capital - 20.0 - - - - (20.0) (20.0) -
preference shares
Issued capital 14.2 - - - - - - 14.2
Share premium 108.9 - - - - - - 108.9
Other reserves 1.5 - - - - - - 1.5
Retained earnings 651.6 1.4 (14.8) (3.6) 20.7 - 3.7 655.3
Total equity
attributable to
equity 796.2 1.4 (14.8) (3.6) 20.7 (20.0) (16.3) 779.9
holders of the parent
Minority interest (0.1) - - - - - - (0.1)
Total equity 796.1 1.4 (14.8) (3.6) 20.7 (20.0) (16.3) 779.8
Appendix 3
Reconciliation of Equity
(unaudited)
At 1 August 2004
Previously IFRS 2 IAS 19 IAS IAS 10 IAS 32 Effect of Restated
reported Share-based Employee Inventories Events after Financial transition under IFRS
under UK payment benefits the balance instruments to IFRS
GAAP sheet date
£m £m £m £m £m £m £m £m
ASSETS
Non-current assets
Property, plant and
equipment 16.6 - - - - - - 16.6
Investments in
associates 0.1 - - - - - - 0.1
Other receivables 0.3 - - - - - - 0.3
Deferred tax assets 2.4 1.4 4.6 1.2 - - 7.2 9.6
19.4 1.4 4.6 1.2 - - 7.2 26.6
Current assets
Inventories 1,025.8 - - (6.4) - - (6.4) 1,019.4
Trade and other
receivables 35.5 - (8.5) - - - (8.5) 27.0
Cash and cash
equivalents 111.9 - - - - - - 111.9
1,173.2 - (8.5) (6.4) - - (14.9) 1,158.3
Total assets 1,192.6 1.4 (3.9) (5.2) - - (7.7) 1,184.9
LIABILITIES
Non-current
liabilities
Interest bearing
loans and (160.0) - - - - - - (160.0)
borrowings
Preference shares - - - - - (20.0) (20.0) (20.0)
Retirement benefit
obligations - - (6.8) - - - (6.8) (6.8)
Land creditors (20.8) - - 1.2 - - 1.2 (19.6)
(180.8) - (6.8) 1.2 - (20.0) (25.6) (206.4)
Current Liabilities
Interest bearing
loans and (15.0) - - - - - - (15.0)
borrowings
Trade and other
payables (153.1) - - - - (0.6) (0.6) (153.7)
Land creditors (115.2) - - 1.3 - - 1.3 (113.9)
Dividends (18.3) - - - 17.7 0.6 18.3 -
Current tax
liabilities (35.2) - - - - - - (35.2)
(336.8) - - 1.3 17.7 - 19.0 (317.8)
Total liabilities (517.6) - (6.8) 2.5 17.7 (20.0) (6.6) (524.2)
Net assets 675.0 1.4 (10.7) (2.7) 17.7 (20.0) (14.3) 660.7
EQUITY
Non-equity share
capital - 20.0 - - - - (20.0) (20.0) -
preference shares
Issued capital 14.0 - - - - - - 14.0
Share premium 104.5 - - - - - - 104.5
Other reserves 1.5 - - - - - - 1.5
Retained earnings 535.1 1.4 (10.7) (2.7) 17.7 - 5.7 540.8
Total equity
attributable to
equity 675.1 1.4 (10.7) (2.7) 17.7 (20.0) (14.3) 660.8
holders of the parent
Minority interest (0.1) - - - - - - (0.1)
Total equity 675.0 1.4 (10.7) (2.7) 17.7 (20.0) (14.3) 660.7
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